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By Jonathan Lee•Last Updated May 14, 2025

Guiding Principles Behind Real Estate Licensees’ Professional Conduct

Introduction: The Foundation of Professional Real Estate Conduct

In the dynamic real estate sector, the behavior of licensed professionals is ideally guided by a blend of ethical standards, legal requirements, and best practices developed to protect clients, promote fairness, and sustain industry trust. Adhering to these principles is not only a regulatory expectation but also a strategic approach for building lasting client relationships and a reputable business. Understanding what guides real estate licensees’ behavior helps both consumers and agents navigate transactions with confidence.

1. Ethical Standards: The Core Compass for Licensees

The National Association of REALTORSÂ® (NAR) Code of Ethics establishes the gold standard for ethical conduct in real estate. While not every licensee is a REALTORÂ®, the Code provides a comprehensive framework recognized across the industry [3] . Its principles include:

Honesty and Truthfulness: Licensees are expected to provide accurate information and avoid deceptive practices in all dealings [2] .
Loyalty and Fairness: The Code emphasizes fair treatment for all parties, regardless of protected characteristics such as race, religion, or gender [2] .
Confidentiality: Client information must be protected, except when disclosure is required by law or ethical obligations [1] .
Disclosure of Material Facts: Licensees must reveal any material defects or facts that could affect property value or desirability [1] .

For those wishing to learn more about the NAR Code of Ethics, you can search for ‘NAR Code of Ethics’ or visit the official NAR website.

Practical Guidance for Implementation

To practice these ethical standards:

Review the NAR Code of Ethics regularly as part of continuing education.
Join local or state REALTORÂ® associations to access ethics training.
Consult your brokerage’s compliance team or manager for clarification on ethical dilemmas.
Document client communications and disclosures to ensure transparency.

Regular ethics training and peer discussions help reinforce and clarify ethical standards in day-to-day operations.

2. Legal Requirements: The Role of Statutes and Regulations

Real estate licensees are legally bound to uphold state and federal laws governing property transactions. These regulations typically require:

Disclosure Obligations: All material facts, defects, or conditions affecting a property must be disclosed to prospective buyers [1] .
Confidentiality Limits: Confidential information may be disclosed only under specific circumstances, such as legal orders or to prevent a crime [1] .
Written Agreements: All representations and agreements should be in writing and clearly understood by all parties [5] .

Licensees must stay current with changes in real estate law through ongoing education and consultation with legal professionals. Brokers typically provide guidance and oversight on legal compliance within their teams.

How to Access Legal Resources

To ensure compliance:

Attend state-approved continuing education courses focusing on real estate law.
Consult your state’s real estate commission for regulatory updates and guidance.
If legal questions arise, contact a real estate attorney or the legal department of your brokerage.

For example, in Louisiana, complaints about licensee conduct can be initiated through the Louisiana Real Estate Commission [2] .

3. Professional Standards and Accountability

Beyond ethics and law, most real estate organizations and brokerages maintain additional professional standards:

Accountability Mechanisms: Violations of ethical or legal standards may result in disciplinary actions, such as fines, suspension, or required education [3] .
Peer Review: Many associations offer mediation and arbitration services to resolve disputes among licensees and clients [4] .

The risk of reputational damage and professional sanctions incentivizes licensees to maintain high standards of conduct.

How to Report or Address Unethical Behavior

If you encounter unethical or illegal conduct:

Contact the agent’s broker directly and express your concerns.
File a complaint with your state real estate commission or local REALTORÂ® association.
Document all interactions and gather evidence to support your claim.

Many associations provide formal complaint processes on their official websites. Search for your state’s real estate commission or local REALTORÂ® association for instructions.

4. Balancing Confidentiality and Disclosure

One of the most challenging aspects of real estate practice is balancing the duty of confidentiality with the obligation to disclose material facts. The NAR Code of Ethics and state laws specify that certain information, such as latent material defects, must always be disclosed-even if a client requests secrecy [1] .

Licensees can manage this balance by:

Educating clients about disclosure requirements at the start of their engagement.
Setting clear expectations regarding what information can and cannot be kept confidential.
Consulting legal counsel when faced with complex situations involving disclosure vs. confidentiality.

Transparent communication and thorough documentation protect both clients and agents from legal and ethical pitfalls.

5. Promoting Fair Treatment and Diversity

The principle of fair treatment is central to ethical real estate practice. Licensees must avoid discrimination and treat all parties equitably, as required by both the NAR Code of Ethics and federal laws such as the Fair Housing Act [2] .

Practical steps to promote fairness include:

Attending diversity and fair housing training sessions.
Implementing inclusive marketing strategies and policies.
Actively monitoring for signs of bias or discrimination in transactions.

If discrimination is suspected, consumers can contact their local fair housing office or state real estate commission for guidance.

6. Continuous Education and Professional Growth

Ongoing education is a pillar of professional conduct in real estate. Many brokerages and industry associations require annual ethics and legal training to keep licensees informed of current standards and regulations [3] .

To access professional development:

Enroll in courses offered by state real estate commissions, REALTORÂ® associations, or accredited online providers.
Participate in webinars, workshops, and annual conferences.
Network with peers to share experiences and best practices.

These activities foster a culture of accountability, innovation, and excellence in the industry.

Key Takeaways and Next Steps

Ideally, real estate licensees’ behavior is guided by a robust combination of ethical principles, legal obligations, and professional standards. These guides protect clients, promote fairness, and foster trust in the marketplace. For consumers, understanding these guiding frameworks empowers you to hold licensees accountable and make informed decisions. For licensees, adherence to these standards is essential for career longevity and reputation.

If you have concerns about a real estate transaction or professional conduct, seek resources and support from your state real estate commission, local REALTORÂ® association, or a qualified real estate attorney. Regular education and transparent communication are your best tools for navigating the complexities of modern real estate practice.